Project Description
The Project comprises financing of essential capex and working capital needs of the agro-industrial holding "Astarta-Kyiv" ("Astarta" or "Astarta Group").
Project Objectives
The Project will support Astarta in financing its essential capex related to modernisation, energy efficiency and environmental improvements of existing production facilities and introduction of climate smart agricultural practices to increase business resilience, as well as working capital needs associated with farming, sugar and soybean processing activities of the Group.
Transition Impact
ETI score: 70
Primary Quality Resilient:
The Project will increase the Group's resilience and will help to sustain its operations and keep production volumes and export, which are essential for food security and for commodities availability for the next seasons.
Secondary Quality Inclusive:
The Project will help to preserve Astarta's human capital and the livelihoods of its employees as well as partner companies across Ukraine that the Group cooperates with throughout its supply chain.
Client Information
TSUKORAGROPROM LLC
Astarta is one of the largest vertically integrated agro-industrial Groups in Ukraine operating five sugar plants, soybean processing factory, ca. 220 thousand ha of leased arable land and a dairy farm. Since 2006 the Group has been listed on the Warsaw Stock Exchange.
EBRD Finance Summary
USD 21,000,000.00
The Project includes financing of up to USD 21 million equivalent for the EBRD's account and up to USD 9 million sustainability-linked loan for the account of the Clean Technology Fund.
Total Project Cost
USD 419,500,000.00
The Project comprises financing of the essential Capex of USD 24.5 million and a portion of the estimated peak WC needs of USD 395.0 million.
Additionality
Additionality stems from the following:
Terms: As a result of the war on Ukraine, the market for financing in Ukraine is very limited. EBRD financing effectively bridges a financing gap left by the withdrawal of commercial banks finance. The loan will have concessional finance component funded by the Clean Technology Fund, which is linked to improvements in corporate climate governance, adoption of precision, soil conservation and agro-ecological agricultural practices in Astarta's farming operations.
Conditionalities: EBRD credit, transition impact and environmental related conditionalities go far beyond what commercial funding sources would require. As part of a technical assistance assignment with the EBRD, Astarta is developing its corporate climate change strategy, which includes a decarbonisation and climate change resilience pathway.
Environmental and Social Summary
Categorised C (2019 ESP). The environmental and social risks associated with the provision of working capital and the modernisation and maintenance of existing sites are not expected to be significant. Astarta's environmental and social impacts and corporate management systems are well known to the Bank from the previous transactions. Due diligence for this transaction was carried out via an environmental and social questionnaire and a review of the Group's EHS policy and procedures.
Astarta is one of the largest integrated agricultural companies in Ukraine, with activities covering grain, sugar and dairy farming. Astarta is operating in line with the applicable EBRD Performance Requirements. The Group has an integrated labour protection, industrial safety, environmental protection and energy management system. The EHS management systems are in line with ISO 14001 and ISO 45001 standards. Collective agreements are in place between the Group and the trade unions. Astarta's environmental and social performance on other EBRD projects has been good, the ESAP agreed for previous transaction has been implemented and the Group provided comprehensive E&S reports. The ESAP for the Project have been agreed for reporting on implementation of a climate strategy and the development of a management plan to address heat stress risks. The Bank will continue to monitor the environmental and social performance of the Group via annual reporting, including tracking of indicators related to the GET attribution.
Technical Cooperation and Grant Financing
TC: Legal due diligence cost will be covered by the Japan-EBRD Technical Cooperation Fund.
Non-TC: The EBRD loan is approved on the basis of first loss risk cover funded by EBRD Crisis Response Special Fund, Netherlands Ukraine Response Platform Individual Sub-Account.
Company Contact Information
Ms. Yevheniia Pyrih
credit@astarta.ua
+38(044) 585-94-09
https://astartaGroup.com/en/
04071, Kyiv, Yaroslavska str. 58
PSD last updated
16 Jun 2023
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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Environmental and Social Policy (ESP)
The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.
More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.
OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
Specific requests for information can be made using the EBRD Enquiries form.
Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.
